| |
A missing market is an economic inefficiency whereby a market for a commodity doesn't exist. The most common example is the idea that the cost of a particular type of environmental damage isn't accounted for by an economy.ExampleTwo technologies compete for energy consumers. They both produce energy at the same cost. However, one produces far more pollution than the other. In an efficient economic model, a market would exist to cap pollution to a country's quality of life targets. The technology that produces more pollution would need to purchase the right to do so. This results in more sales for the clean technology. In other words, economic decisions become more rational and efficient. When the market for pollution is missing, the technology that pollutes more may become dominant even where the clean technology is cost competitive.
Sustainability
This is the complete list of articles we have written about sustainability.
If you enjoyed this page, please consider bookmarking Simplicable.
© 2010-2023 Simplicable. All Rights Reserved. Reproduction of materials found on this site, in any form, without explicit permission is prohibited.
View credits & copyrights or citation information for this page.
|